Benchmarks trim losses; SBI Cards IPO fully bid

Key equity indices trimmed losses in mid-morning trade. The Nifty 50 index slipped and descended towards 11,250 level. Selling was broad based with metal stocks losing the most. Bargain hunting emerged after India's Services PMI jumped to 57.5 in February.

At 11:25 IST, the S&P BSE Sensex, was down 217.17 points or 0.56% at 38,406.53. The Nifty 50 index was down 52.45 points or 0.46% at 11,250.85.

The broader market was under pressure. The S&P BSE Mid-Cap index was down 1.11% while the S&P BSE Small-Cap index was down 1%.

The market breadth was weak. On the BSE, 618 shares rose and 1327 shares fell. A total of 111 shares were unchanged. In Nifty 50 index, the breadth was negative with 20 stocks advancing and 30 stocks declining.

 

Economy:

The IHS Markit India Services PMI increased to 57.5 in February 2020 from 55.5 in January 2020. The latest reading pointed to the strongest pace of expansion since January 2013, as both new orders and output rose at a faster pace.

Commenting on the latest survey results, Pollyanna de Lima, Principal Economist at IHS Markit, said: "Growth in India's service sector accelerated further halfway through the final quarter of fiscal year 2019-20, with the trend for business activity improving in each month since last September when the sharpest contraction for 19 months was recorded. Behind the resilience in the trend for business activity stands healthy demand for services from both the domestic and international markets. The data also showed that service providers experienced a marked improvement in workforce productivity, with the sharp rise in business activity happening despite a softer and only modest increase in employment."Positive gains in new work across the manufacturing and service sectors suggest that private sector output will likely increase markedly again in March, boding well for final quarter GDP following expectations of a flat growth rate in Q3 FY 2019/20."

SBI Cards IPO:

The initial public offer (IPO) of SBI Cards and Payment Services was subscribed 1.8 times by 11:30 IST today, 4 March 2020. The issue will close for qualified institutional bidders on Wednesday (4 March) while remaining open till 5 March for all other investors. The issue opened for bidding on Monday, 2 March 2020. The price band is Rs 750 to Rs 755 per share.

Buzzing Index:

The Nifty Metal index slumped 1.68% to 2281.70, as investors booked profits after yesterday's 5.6% rally.

Among the metal stocks, Jindal Steel & Power (down 4.3%), Tata Steel (down 3.75%), Steel Authority of India (down 3.33%), Vedanta (down 1.76%), National Aluminium Company (down 1.59%), Tata Metaliks (down 1.5%), JSW Steel (down 1.47%), Hindustan Zinc (down 1.28%) and Hindalco Industries (down 0.06%) were top losers in metal segment.

Stocks in Spotlight:

Newgen Software Technologies rose 2.86% to Rs 204.85 after the company said on Tuesday that the US Patent Office has issued a patent for its mark detection system and methodology. The issuance of this patent recognises our commitment and effort towards driving digitisation and optimising the document management cycle while ensuring security and compliance," said Anand Raman, Executive Vice President and Chief Operating Officer at Newgen Software Inc.

Infosys rose 0.88% to Rs 752.85 after the company announced a strategic long-term partnership with K+S AG to support the latter's 'Shaping 2030 Strategy'. Infosys will setup two state-of-the-art, centralized and dedicated datacentres in Kassel, Germany and 16 regional datacentres in Europe, USA, Canada, and South America along with a public cloud ecosystem

Hindustan Aeronautics (HAL) on Tuesday said it received a notice from International Court of Arbitration of the International Chamber of Commerce (ICC) on request for arbitration from RUAG Aerospace Services GMBH. HAL has initiated necessary action with reference to arbitration process. The amount in dispute partially quantified by the opponent party is $21,872,500 (i.e. EUR 20,000,000) against alleged damages on breach of agreement regarding supply of structural parts for production of Dornier-228, by HAL. Shares of HAL was down 3.10% to Rs 652.

Global Markets:

Most Asian markets were trading lower on Wednesday as an emergency rate cut from the US Federal Reserve did little to soothe investor fears over the coronavirus's widening fallout.

The US market finished sharply lower on Tuesday, after a volatile trading session, and Treasury yields fell to historic lows, with Wall Street deeming a surprise inter-meeting interest-rate cut from the Federal Reserve insufficient to restore confidence in a market that has been rocked by worries about the spread of coronavirus world-wide.

The decline for markets came as the Fed announced a half-a-percentage-point rate cut, saying that while the economy's fundamentals remain strong, the "coronavirus-poses evolving risks to economic activity."

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